LONDON, Nov 23 European shares posted their best
weekly gain so far this year after rising for a fifth day on
Friday, boosted by strong German data and growing expectations
Greece will soon get the next dose of financial help.

But key indexes failed to break out of their recent ranges,
suggesting investors were reluctant to bet on a sustained rally
and falls were likely in the coming days if a euro group meeting
on Monday fails to yield an agreement on Greece or U.S. budget
talks stall.

Germany's BASF and Bayer led a rally
in chemical stocks on Friday after a German business morale
index surprised with its first rise in seven months, raising the
prospect that Europe's largest economy can regain some momentum.

The Ifo survey built on better-than-expected manufacturing
data from Germany and its key export-market, China, helping the
export-driven chemical sector end the week 5.7 percent higher,
the best performer in Europe.

Investors also welcomed suggestions by the Greek government
that the country's lenders were coming closer to an agreement on
the next tranche of aid, sending euro zone banks and the
euro higher in the afternoon.

"Market sentiment is positive (on a Greek deal) and if we
don't get one it will be a problem, although I think the push
we've seen in the last few days has more to do with the Far
East," a trader in Milan said.

"I saw a few small buys from domestic funds on quality banks
like Intesa Sanpaolo or underperformers like Banca
Popolare di Milano, which is most interesting with a
view to a rebound."

Popolare di Milano rose 1.1 percent and Intesa closed up 1
percent, with the former extending a bounce from a three-month
trough hit on Wednesday.

They helped the pan-European FTSEurofirst 300
index close 0.6 percent higher at 1,110.45 points, taking its
gains for the week to 4 percent.

Volume was light at 63 percent of its 90-day average as wall
Street was scheduled to close early for Black Friday.

Among a handful of heavily traded stocks was French power
group EDF, which rose 4.6 percent in volume three time
its average after unveiling an interim cash dividend.

Nokia topped the FTSEurofirst 300, rising 9.3
percent after a media report said the Finnish handset maker was
set to reach strong quarterly sales of its newly-launched
smartphones.

Bottom of the table was Spanish travel technology company
Amadeus, down 2.6 percent in twice its volume average,
on news HSBC failed to find enough buyers in a placement of
shares worth 400 million euros.

CHOPPY TRADING AHEAD

Charts on the Euro STOXX 50, up 0.9 percent at
2,557.03, showed the index lacked sufficient momentum to break
above its September and October highs at 2,579 and 2,610,
respectively.

This left the index exposed to a possible fall towards the
lower end of its two month range in the 2,450 area.

"Only a push above 2,579/2,610 area would reinstate a
bullish trend," Nicolas Suiffet, a technical analyst at Trading
Central, said.

"As long as prices remain capped by the upper end of the
trading range at 2,610, look for choppy price action with a
bearish bias towards 2,500, the former neckline of a double
bottom pattern, and 2,445, its 100-day simple moving average."

He added momentum indicators such as Bollinger bands, and
the 20- and 50-day simple moving averages were also highlighting
a lack of momentum.

Traders were seeking to take advantage of these market
conditions by looking for bargains when indexes approached the
low end of the range and locking profits at the top.

"People are buying into the recovery but with one eye still
on Greece and the United States, so there hasn't been any high
appetite for aggressive stocks, such as miners," Ed Woolfitt,
head of trading at Galvan, said.

"Buy on the dips and sell on the spikes, trailing stops and
good trends."

He expected future gains in mining stocks, which depend on
demand from metal consumer China, to help Britain's FTSE 100
end the year above 6,000 points, compared to a close of
5,819 on Friday.

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